German chemical giant BASF has given final approval for the construction of its planned Verbund site project in Zhanjiang city in the western part of Guangdong province on Tuesday, demonstrating its confidence in China's economic prospects.

The mega chemical project will form a solid foundation for a world-class industrial cluster in Zhanjiang and help establish stronger business connections between China and rest of the world.

The project is now proceeding steadily and on schedule, BASF said in a press release.

"The focus will now be on building the core of the Verbund, which includes a steam cracker and several downstream plants for the production of petrochemicals and intermediates, among others," it said.

BASF will invest up to 10 billion euros ($10.2 billion) by 2030 to build the Verbund site project.

In 2020, BASF started construction of the first plant at the planned integrated Verbund site in the coastal city of Zhanjiang in Leizhou Peninsula that faces the South China Sea.

The project will be BASF's third-largest Verbund site worldwide after Ludwigshafen, Germany and Antwerp, Belgium.

The site will be built over several phases and is expected to be fully operational by 2030.